Cities look to challenge DTE over LED streetlight cost hikes

Some southeast Michigan cities are preparing to take on the state’s largest utility.

At issue is DTE Energy’s plan to raise rates on municipal LED streetlight installations.

Rick Bunch, director of the street lighting consortium with the Southeast Michigan Regional Energy office, said that’s a problem for cities that have already invested heavily in LEDs, which are more energy-efficient, but cost more upfront.

“Cities want to make back that investment in annual operating savings,” Bunch says. “If there’s very little difference between the current technology and the new technology, they’ll never make back that investment.”

Bunch said many southeast Michigan cities — including Ypsilanti, Dearborn, and Detroit — have invested heavily in LEDs, with the belief it would produce long-term cost savings.

“They had been operating on cost projections from DTE that showed them reaping relatively robust savings over the lifetime of this technology,” Bunch says. “And so for the annual operating costs of the LED’s to go up by 10-15%, depending on wattage, really bites into the savings they projected.”

Even more puzzling to some is that DTE actually wants to lower rates to operate high-pressure sodium street lamps, despite the fact that they use substantially more electricity.

Environmental groups are also upset by the proposed rate changes, which they see as an effort to squash municipal investment in cleaner technologies.

“Literally and figuratively, it doesn’t make sense,” to raise rates on LEDs while cutting rates for more energy-intensive lighting, says Eric Keller of the group Clean Water Action.

A new report from Public Sector Consultants projects Michigan will lose enough energy production for 1 million people in 2016.

According to Julie Metty Bennett, who helped author the report, Michigan is overly reliant on coal-fired power plants compared to other states.

Bennett says many of these coal plants in Michigan won't comply with new regulations from the EPA.

“Given the age of our coal plants, upgrading them to comply with the new EPA regulations is not economically viable. Because we are so reliant on these old coal plants, we are going to lose a significant amount of our energy supply, and it takes years to replace that capacity,” Julie says.